Gesture politics from Google, but will it make a difference?

Telegraph View: By announcing that it will no longer censor its search engine,
Google is effectively announcing its withdrawal from China.

In recent days, China has passed two significant milestones: overtaking Germany to become the world's leading exporter, and the United States to become the world's biggest market for cars. Yesterday, it passed a third, when it became the first country to be dealt a very public snub by one of the best-known brands on the planet.

Few companies have either the wealth or the mindset that enabled Google to take on the People's Republic so brazenly. The internet company was widely criticised when it set up shop in China in 2006, because it was obliged to accept a level of self-censorship to which it would never acquiesce in any other country. Google says it made the move "in a spirit of optimism" and argued that "increased access to information for people in China and a more open internet outweighed our discomfort in agreeing to censor some results". Since then, its hopes of a softening in the Communist regime's approach to the web have been dashed. A "sophisticated" cyber-attack, which targeted at least 20 major American companies in an effort to gather information on human-rights activists, has finally persuaded it to act. In announcing that it will no longer censor its search engine, Google is effectively announcing its withdrawal from China.

It can certainly afford to do so. While it commands about a third of the market in China, in revenue terms its withdrawal will be barely noticed in the short term – analysts estimate that only about 1 per cent of its global earnings comes from there. So is this a hard-headed (and conscience-salving) commercial decision dressed up as a crusade for free speech? Perhaps, but while Google's posturing about "doing no evil" is not to everyone's taste, it has clearly been uncomfortable doing business with Beijing. Many firms find they have to hold their noses when operating in China. Google sees itself as big enough and bold enough to be prepared to walk away.

The public response from Beijing will be a shrug of unconcern, spiced with a peppering of abuse (a senior executive of Baidu, the company's regime-friendly rival in China, said yesterday that Google's decision was financially motivated and "makes me sick"). China's leaders showed at the climate change conference in Copenhagen that, unburdened as they are by the irksome checks and balances of democracy, they will not lose sleep when pilloried by international opinion. Yet the regime is not stupid, and in private will be reassessing whether its oppressive and heavy-handed approach to dissident voices may start to prove economically counter-productive. Google's stand may be a straw in the wind, but it could prove an important one.